Tuesday, 7 September 2010

Strawberry vs cherry yoghurt aka Lidl v Vierzon in C-159/09 - AG's opinion on comparative and misleading advertising

7 September 2010: ECJ Advocate General's opinion in case C-159/09 Lidl v Vierzon

Advocate General gave today its opinion in the Lidl v Vierzon case (English text is unavailable for now) concerning interpretation of the comparative advertisement provisions of the Directive 84/450 on misleading advertising (as amended by Directive 97/55).

Two parties involved in this case are companies Lidl and Vierzon who have a chain of international supermarkets, respectively Lidl and Leclerc. On 23 Septemeber 2006 Vierzon published in a local French newspaper an advertisement in which it compared register receipts for groceries done in four different supermarkets. In every supermarket 34 products were purchased, within which mostly products meant for daily use: food and cleaning products. The products on all receipts were mostly overlapping. The brands of the products were not mentioned. Out of the total price of the purchases it seemed that Leclerc was the cheapest supermarket. Vierzon published it with the slogan in which it mentioned that Leclerc was the cheapest supermarket. Lidl questioned this sort of advertising as an example of an unfair comparative advertising, misleading the consumers.

The French court asked a very specific question to the ECJ:

"Is Article 3a of Directive 84/450 (...) to be interpreted as meaning that it is unlawful to engage in comparative advertising on the basis of the price of products meeting the same needs or intended for the same purpose, that is to say, products which are sufficiently interchangeable, on the sole ground that, in regard to food products, the extent to which consumers would like to eat those products, or, in any case, the pleasure of consuming them, is completely different according to the conditions and the place of production, the ingredients used and the experience of the producer?"

The Advocate General had no doubts that the answer should be that a comparative advertising of food products on the basis of their price is lawful as far as the laws on misleading and comparative advertising are concerned, even if the compared products differ as to taste, as long as one can be substituted by the other. The national court should consider whether the comparative advertising fulfills other conditions of the Directive, specifically whether it is not a misleading advertisement. (Par. 63)

The Advocate General mentioned that there are eight cumulative requirements in Art. 3a of the Directive for the comparative advertising to be lawful, out of which three were relevant in this case: (Par. 40)
1. The comparative advertisement may not be misleading. (Par. 41)
2. The comparative advertisement compares products or services meeting the same needs or intended for the same purpose. This requirement may not be interpreted too strictly. It is sufficient if the consumer may substitute one good with another. (Par. 42)
3. The comparative advertisement compares objectively one or more material, relevant, verifiable and representative features of those goods and services, which may include price. Comparative advertisement may compare only prices of goods. (Par. 43)

As far as the second requirement is concerned:

The Advocate General stated that it does not matter that the advertisement in a given case compares lists of products and not specific products since the products on the lists are mentioned in a specific order and can be easily substituted by products placed on the same position on other lists - which gives these lists sufficient specifity. (Par. 46) Furthermore, the food products listed on the receipts do not have to bear the same taste. The comparison would lose its point if the only lawful comparative advertisement would be for advertising identical products since the competitors could easily claim unlawfulness of any comparative advertisement by stating that the taste of the food products differs. (Par. 49/53) It is not possible to mention all the factors that would make the food products interchangeable for consumers - that has to be decided on a case by case basis. However, AG mentions that elements such as quality of compared products or assortiment to which they belong could be essential. (Par. 51)

As far as the first requirement is concerned:
Despite the French court not making an inquiry about that sort of comparative advertisement as being misleading, the AG decided to give a few tips for the future. First of all, such a comparative advertisement may not be seen as misleading only because the brand of the products is not mentioned in it. That would be misleading only in cases where a brand of a product could seriously influence the consumer's choice and the comparison would be done between brands that seriously differ as to brand recognition. (Par. 58) The yardstick lies quite high here. (Par. 59) Such advertisement could be misleading if it would not be possible to identify compared products (Par. 61) or if it gives the consumer a misguided belief that all articles in that supermarket would be cheaper than by its competition (Par. 62) The last one could happen only if the advertisement did not compare specific products but just a general price level in the supermarkets. Even the fact that the comparative advertisement was enriched by a slogan stating that the prices in Leclerc are cheaper did not seem relevant for the Advocate General to consider this advertisement misleading. (Par. 62)

Advocate General mentioned in one of the paragraphs of this judgment that comparative advertisement should be allowed in the broadest scope possible, as long as it does not mislead the consumers. On the basis of this judgment I started to have doubts whether that second requirement is really being taken into account. In my opinion the consument would compare the total prices on the receipts and pay attention to the slogan, concluding that he should start doing groceries in Leclerc pronto. I am not so certain whether the consumer would consider that if the brands had not been mentioned on the list that could mean that the list included e.g. two different brands of butter on them (with a 0.50 euro difference; multiply 0.50 euro by 34 products and that could justify price differences between the receipts). To me it seems that such a practice leaves lots of room for misleading the consumers and it should be more strictly controlled.

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